Obamacare Employer Mandate Delayed One Year until 2015

The Obama Administration released a statement yesterday that the employer mandate requiring businesses with more than 49 full-time-equivalent employees to offer affordable health insurance or pay a penalty will be delayed until 2015.

Obamacare has thrown businesses another curve ball. Up until yesterday, employers with more than 50 full-time-equivalent employees (FTEs) were calculating the costs of offering their employees ACA-compliant health insurance versus paying a penalty. Yesterday, the U.S. Treasury released a statement that businesses with more than 50 FTEs that fail to offer ACA-compliant health insurance will not see penalties until 2015. An excerpt from the press release states:

Over the past several months, the Administration has been engaging in a dialogue with businesses – many of which already provide health coverage for their workers – about the new employer and insurer reporting requirements under the Affordable Care Act (ACA). We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action.

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. Within the next week, we will publish formal guidance describing this transition. Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.

What does this mean for business owners?

The implementation of Obamacare has not changed. Business owners will still need to become ACA compliant, small businesses could still be eligible for tax credits, and individuals will still be required to obtain individual health insurance if they do not receive it through their employer. The only change is the deadline large companies will have before they start seeing penalties for non-compliance.

The parts of the law listed below will now go into effect in 2015 instead of 2014:

1. Employers will not have to report certain information to the IRS. This has been referred to as “employer reporting requirements.” We are waiting for the IRS to give details on what requirements this includes.

2. The rule that says large employers have to offer coverage to full-time workers or pay a penalty. “Large employer” in this case is a business that has 50 or more full-time or full-time equivalent employees (that work an average of 30 hours a week).

3. The rule that says coverage offered by large employers cannot be more than 9.5% of a worker’s pay for self-only coverage.

About SOI

SOI is a leading professional employer organization (PEO) for small and medium-sized businesses (SMBs) serving as a trusted partner in integrated human resource (HR) compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing. SOI is based in Charlotte, NC and supports tens of thousands of worksite employees throughout the U.S. For more information, visit SOI.com